WE’RE NOT ‘BROKE,’ AND BOEHNER SHOULDN’T SAY THAT WE ARE…. It’s become one of House Speaker John Boehner’s (R-Ohio) favorite phrases: “We’re broke.” The line has become a justification for everything Republicans have wanted to do for years.
Why would the House GOP want to make brutal cuts in areas like education, medical research, infrastructure, job training, and national security, all of which would cost the economy hundreds of thousands of jobs? That’s easy — “we’re broke.”
There’s a nagging detail, though, that generally goes overlooked: Boehner has no idea what he’s talking about. When the Speaker and other Republicans who are following his rhetorical lead repeat this little talking point, they’re lying.
Boehner’s assessment dominates a debate over the federal budget that could lead to a government shutdown. It is a widely shared view with just one flaw: It’s wrong.
“The U.S. government is not broke,” said Marc Chandler, global head of currency strategy for Brown Brothers Harriman & Co. in New York. “There’s no evidence that the market is treating the U.S. government like it’s broke.”
The U.S. today is able to borrow at historically low interest rates, paying 0.68 percent on a two-year note that it had to offer at 5.1 percent before the financial crisis began in 2007. Financial products that pay off if Uncle Sam defaults aren’t attracting unusual investor demand. And tax revenue as a percentage of the economy is at a 60-year low, meaning if the government needs to raise cash and can summon the political will, it could do so. […]
A person, company or nation would be defined as “broke” if it couldn’t pay its bills, and that is not the case with the U.S. Despite an annual budget deficit expected to reach $1.6 trillion this year, the government continues to meet its financial obligations, and investors say there is little concern that will change.
A spokesperson for Boehner defended the lie, arguing that “broke” means spending more than one takes in for a long period of time.
Oh, good. We’ve been reduced to parsing the meaning of the word “broke.” It’s another fine day for our sterling public discourse.
This isn’t to pick on Boehner exclusively. Republican lawmakers, governors, and media personalities have embraced the same phrase.
But they’re all wrong. Worse, they seem to be trying to undermine confidence in American finances, on purpose, as part of a political agenda. That’s not only dumb, it’s dangerous, and I really wish Republicans would be a little more responsible, though that’s clearly asking too much.
In any case, this isn’t complicated. We have the ability to borrow plenty of money at low interest rates; we have easily the largest economy on the planet; we’re facing no borrowing limits; and as Jamelle Bouie noted this morning, the United States also has the ability to “print money to cover its debts and can still rely on global investors.”
And despite all of this, Republicans still say debt reduction is more important than economic growth, and are prepared to make unemployment worse, on purpose, because of their twisted priorities.
But if Boehner or his office were ever serious about defending the lie, perhaps the Speaker could explain why we’re “broke” now, and not when he was adding $5 trillion to the debt during the Bush era. Is it just a coincidence that we’re “broke” because we have a Democratic president who inherited a $1.3 trillion deficit from his Republican predecessor?